Online Surveys 101

How Do Online Survey Panels Work?

Comfortable male survey taker at his computer

You might be a seasoned survey taker, or you might be new to the world of online research. Either way, it can be helpful to know exactly how the online survey taking process works and how you can benefit from it.

First off, some definitions:

  • Respondent/panelist – this is you, the survey taker.
  • Online survey panel – this is the online community of survey takers. You, along with everyone else, form the “panel” portion.
  • Market research company – this is the company who operates the online survey panel. Sometimes the online survey panel and the market research company share the same name, but most of the time, they differ.

Why Online Survey Panels are Useful

woman interviewing man

Making bad decisions in business is expensive, so people hire market research companies to conduct surveys for them to reduce their market risk. By posing questions to those who are interested in their brand, product or service, or people who fit into a targeted demographic, a company can gain a lot of useful insight which can help them make better business decisions.

Some big companies have their own market research departments and therefore conduct their own surveys. Most companies, governments, non-profits, etc. however don’t have this luxury, and instead, outsource a panel provider (aka a market research company) to conduct market research assignments for them, on a regular or as-needed basis.

One Market Research Company, Many Panels

Most market research companies have only one online survey panel that they run, but some of the bigger companies run multiple panels. The panels will be slightly different and may have different objectives. For instance, it’s common for market research companies operating two or more panels to have one aimed at the general population, and another aimed specifically at teens. Teens are notoriously difficult to recruit and to try to convince to take surveys, so having a panel dedicated to this specific demographic can keep things more focused.

How Survey Panels are Managed

An typical online survey panel will aim to be as representative of the general population as possible. So if for instance a panel is only available to residents of the US, it will aim to mirror the population disbursement of different cities, along with its demographic data. If a panel has 100,000 participants, it will try to take what the entire US population looks like (with approximately 310 million people), and project it on a micro scale. However, if a research company is hired to perform a study for a particular region or city, it might actively try recruiting participants in that specific area, just so that they can properly execute the study.

Let’s Talk Money

Whoever hires a market research company to administer their studies is the one who pays their bills. Most of the time this is in the form of a private corporation, but sometimes individuals, government, non-profit organizations, etc. are looking for answers to questions they may have.

piggy bank

The market research company will work with their client to narrow down what questions should be asked and how. They will help them design an online survey, including what product images to use (if any), the length of the survey, and who should take the survey (example: men, aged 18-36 living in Texas). The target demographic of the survey will usually be aimed at the company’s target or current market. The market research company will also provide a quote to the client for the cost of conducting the survey.

The respondents (that’s you), will then be asked to complete the survey. The reward for completing the survey will be stated and will be based on what the market research company has billed the client along with the client’s budget, the complexity of the survey, the demographic of the people contacted for the survey, etc. It’s always up to you whether you wish to complete the survey or not.

Why Account “Cashout” Minimums Exist

Administration costs make it very expensive for a panel to dole out very small rewards to their panelists, which is why a minimum account balance of $10+ is usually required before members are able “cash out”, or request their rewards from a panel. You can imagine how much work would be involved in paying every respondent after every single survey they take; thankfully the advent of payment methods such as PayPal and electronic gift cards have helped reduce minimum account balance requirements over the years.

Panels who still offer the option to pay their survey takers by check will often have higher minimum account balances due to the cost of the actual checks, the work involved in printing out the payee information on the checks, stuffing the envelopes, and paying for postage, etc.

Why Sweepstakes are Popular

red present

Offering the chance to win multiple prizes for completing a survey is often a popular option for survey panels, as there are less administration costs involved. The actual cost of such prizes is often the same and sometimes even higher than simply paying each individual panelist for completing a survey, but is often preferred because of its simplicity.

For example, it is easier for a market research company to award 1 prize of $1,000, 2 prizes of $500 and 10 prizes of $100 when a survey is complete, versus crediting 3,000 people with $1.00. This approach arguably lowers response rates (people who actually take the survey), and can possibly influence the quality of the responses themselves, but can still be the preferred reward method for rewarding panelists.


Online survey panels have become one of the primary methods for businesses to gain insight into their customers so that they can make better business decisions. By becoming part of this process, you, as a survey taker, influence the products and services of tomorrow.

Ready to become a survey taker?

Now that you know how online survey panels work, you might be ready to join a few legitimate survey sites and start participating in paid studies.